Financial Wellness Wednesdays - Emergency Fund

 

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Emergency Fund

There are 2 levels of emergency funds. A minimum emergency fund is $1,000 and it will will cover many emergencies like a car repair, a deductible for an emergency hospital visit or even a broken water heater. 

Once you have the minimum saved you can work on a more extensive emergency fund to cover larger emergencies such as unemployment . This fund should be anywhere from 3 to 6 months of your basic living expenses such as rent/mortgage, utilities, food and transportation. This gives you time to find another job.  

It doesn't take long to save for the minimum $1,000 fund. But you must be on purpose about it and then don't touch it under any circumstance except in a real emergency. 

One of the best ways to find money to save for your emergency fund is to make a budget. Identify your basic living expenses. Leave off amounts for going out to eat, housekeeper, pedicures, and other items that you don't really need to survive. Once you prepare your budget with only these expenses, you will identify "extra" money to put in the emergency fund. 

Now that you have a minimum emergency fund, you will also find peace of mind knowing you are covered in an emergency.  

Next step? Get rid of your debt... and I can help with that.

You can master your money... and I can help!  

Contact Michelle Serna by filling out the Contact Me form to the right of this post.